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United Way Controversy Curbs Dues : Charity: Many regional offices fear donations will fall following charges of lavish living by president of the organization.

February 27, 1992|SARA FRITZ | TIMES STAFF WRITER

WASHINGTON — Fearing a drop-off in donations, many regional United Way affiliates across the nation said Wednesday they will withhold dues to the national association until its president, William Aramony, either resigns or is cleared of allegations that he used charitable contributions to finance a lavish personal lifestyle.

"Obviously, we are concerned about the impact of this on donor confidence," said Amanda Bowman, senior vice president of the United Way in New York City. "We have not paid or intend to pay 1992 dues until our board sees the results of an investigation due on April 2."

The Orange County branch announced Tuesday that it would withhold payment of its yearly dues until the allegations of mismanagement are investigated.

"We are allowing the investigation to unfold and feel that withholding our dues is adequate protection of the interests of our local United Way," said United Way of Orange County spokesman Jeff Rocke said Wednesday.

In addition to New York City, other United Way affiliates withholding dues included those in Washington, San Francisco, Cleveland, Las Vegas, Richmond, Va., Seattle, Portland, Ore., St. Cloud, Minn., Tampa, Fla., Charlotte, N.C., Philadelphia, Denver, Boise, Ida., and Ventura County.

Philanthropist Walter H. Annenberg, who gave $450,000 last year to United Way chapters in Philadelphia and in the Palm Springs, Calif., area, called for Aramony's dismissal.

Writing Wednesday to John Akers, chairman of United Way of America, Annenberg called for Aramony's removal "forthwith, lest the destructive fallout from needless delay in separating him will only be fatal to the local United Way chapters in our country."

In Washington, United Way President Geoffrey Edwards also called upon Aramony to resign without waiting for the results of an investigation being conducted by a local law firm at the request of the board of the United Way of America. Affiliates in Richmond and elsewhere were understood to be seeking his resignation as well.

In Los Angeles, Jill Nash, United Way's senior vice president for marketing, said the local board of directors would meet Monday to discuss the matter, but had as yet made no decision to withhold dues. "We will review a lot of options," Nash said.

During Aramony's 22 years at the helm of United Way of America, he has been credited with unifying many different community chest groups into a national organization and attaining a higher profile for United Way through its marketing alliance with the National Football League.

But at the same time, according to the Washington Post, he has been using charitable donations to finance a free-spending lifestyle that included limousines, overseas trips on the Concorde and a condominium in New York City. In addition, Aramony, who earns $463,000 a year in salary and benefits, hired a longtime friend plagued by legal and financial problems in 1989 to serve as the organization's chief financial officer.

Questions also have been raised about three independent, taxable corporations created by United Way's board of governors with Aramony's support. The Post reported that Aramony and several of his longtime friends or colleagues sit on the boards of the three small companies and that Aramony's son, Robert D. Aramony, has worked for all three companies at various times.

One of the companies, the Post reported, was given $900,000 in seed money by United Way of America and used about $430,000 to buy and decorate the condominium on New York's affluent Upper East Side. The unit is used primarily by Aramony on his business trips to New York.

Aramony could not be reached for comment, but in suburban Alexandria, Va., where United Way of America is headquartered, officials of the organization acknowledged that the affiliates were reacting negatively to the bad publicity. "What we are hearing is that many United Ways may delay decision-making on whether and how much to pay until they hear the outcome," said Tony DeCristofaro, public relations director. Officials said a teleconference would be held with affiliates today to discuss the reports.

United Way of America is the umbrella organization that authorizes some 2,200 regional organizations to use its familiar logo and provides other services such as training sessions and publicity materials. In exchange for these services, the affiliates pay dues amounting to no more than 1% of their total donations.

In 1990, United Way's affiliate organizations raised a total of $3.1 billion for charities, most of it through payroll deductions. Their dues to the United Way of America totaled about $29 million, and most of it was spent for personnel and program costs.

Many United Way officials around the country told Times reporters Wednesday that they have been receiving anxious telephone inquiries from donors who fear that their contributions are being misused.

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